Brown under pensions fire

Brown under pensions fire

Wednesday 9 April 2003 06.54 EDT
First published on Wednesday 9 April 2003 06.54 EDT

Pensioner groups yesterday called on Gordon Brown to abandon plans to extend means-tested benefits in his Budget today, following a critical report by the main parliamentary watchdog which blames the government for creating a system of retirement benefits that are confusing and complex.

Campaigners said the extensive use of claim forms and the overlapping responsibilities of different government agencies only confused pensioners. The chancellor should return to a flat-rate state pension that claimants could understand.

The chancellor will tell MPs today that millions of pensioners have been raised out of poverty since 1997 through a mix of targeted benefits. He will add that an extra £2.5bn can be claimed by almost half of the UK's 11m pensioners when the pension credit becomes available in October. The credit will allow pensioners with small occupational pensions and private savings to keep some of their benefit income.

But the public accounts committee said research revealed that two million pensioners living on low incomes have missed out on almost £2bn of unclaimed benefits. It said between a quarter and a third of pensioners had missed out on the minimum income guarantee which can boost pensioner incomes by over a quarter to £102 a week, and one third failed to claim council tax benefit.

The committee criticised the department of work and pensions, which administers the treasury-designed system of benefits, for setting low targets for take-up rates. It expects only 73% of pensioners eligible for the pension credit to claim.

Edward Leigh MP, chairman of the committee, said there was an urgent need to reduce confusion and increase take-up. He welcomed the creation last year of the Pension Service, which oversees the provision of pension benefits, but said the government needed to act quickly before more pensioners lost out.

"Some two million pensioners live in low-income households but almost £2bn of the main pot of benefits available to them remains unclaimed," he said. "I welcome the creation of the Pension Service to focus on the needs of pensioners. The lamentable state of affairs where vulnerable pensioners are confused about the support they are entitled to and have to provide the same information time and again to different agencies must be addressed urgently."

The National Pensioners Convention, which campaigns for pensioner rights, said the chancellor should scrap means tested benefits and credits in favour of higher basic pension payments.

Joe Harris, NPC general secretary said: "This report proves that means-testing and pensioners don't mix. The government claims that their policies are targeting help for the poorest pensioners, but the poorest don't receive benefits because the system is too complicated or demeaning. Clearly the government's pensions policy isn't working and pensioners are suffering."

Mervyn Kohler, head of public affairs at Help the Aged, said: "As the government rolls out the largest extension of means testing ever, the authoritative Public Accounts Committee rightly questions the whole process. It points out how inefficient means testing is at getting benefits to the people who need them, how complex the system is, with pensioners having 23 potential entitlements, and criticises the government for its very modest targets for benefit take-up."